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How to Read a Credit Report?

  • Client Identifications – Name, Date of Birth, Address, Previous Address, Employment History

  • Public Records– Information derived from the public court systems regarding financial records, tax liens, foreclosures, bankruptcies and child support

  • Trade lines – These items can consist of credit cards, home loans, auto loans, monthly installment loans, etc.

  • Collections – Accounts reported to collection agencies that are considered unpaid/and or negative debt

  • Inquiries – Companies and or individuals that have pulled your credit for the purposes of monitoring your credit, credit approval, and or pre-approval. Some inquiries are only seen by the consumer and any inquiry done by a consumer does not affect their credit score.

 

How is your Credit Score affected?

 

New Accounts

Your score can be affected by the following things:

  • New accounts
  • Number of recent credit inquiries
  • How many new accounts have been established? This affects your score by 10%

 

Length of Your Credit History
  • The length of time the new accounts have been established affects your score by 15%
  • Length of credit history, meaning how long your accounts have been open.

 

Types of Credit

Make sure that you have different kinds of accounts open. This affects 10% of your overall score.

  • Credit Cards
  • Mortgage Loans
  • Auto Loans
  • Retail Credit

 

Amount that you Owe

This affects your score by 30%, i.e., the proportion of balances to the actual credit limit! Most people max out their cards not knowing that it affects their score!

  • Number of accounts with a balance
  • Amount owed on certain accounts

 

Payment History

35% of your credit score is affected by your payment history. Examples are,

  • How many times you have been late,
  • How delinquent are your accounts,
  • The number of delinquent accounts you have
  • This is why it is extremely important to pay your bills on time!

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